If you follow college football, you are obviously aware that Ohio State won the College Football Playoff over Notre Dame.

You also know that Penn State was ousted by the Fighting Irish in the semifinals.

It was widely rumored that the Buckeyes’ roster was the “best money could buy,” coming in at $20 million. Yes, but according to available information, Nittany Lion quarterback Drew Allar is making around $1.9 million in NIL deals, while running back Nick Singleton is making between $100,000 and $200,000.

This ain’t your father’s college football any more.

And it could affect Pennsylvania more than you might know.

For the past three seasons, NIL, or Name, Image and Likeness, ruled the landscape. NIL refers to a person’s legal right to control how their image is used, including commercially. It became the universal shorthand for college athletes’ ability to become paid endorsers and monetize their success outside of their school-funded scholarships and benefits.

That was then. Now the new buzzwords are “House vs. NCAA”, or widely known as the House settlement.

The House Settlement

NCAA institutions such as Penn State, Pitt and Temple that opt into the settlement, brought about when two athletes sued for damages related to NIL rights, will be permitted to compensate their own student-athletes directly. According to estimates, the permissive cap imposed by the settlement could be around $20-22 million in the 2025-26 academic year, meaning any amount up to the cap could be used to compensate student-athletes.

Former and current student-athletes who began competing in 2016 through Sept. 15, 2024 are eligible for name, image, and likeness (NIL) backpay. Both parties negotiated a settlement to distribute $2.576 billion to eligible student-athletes. Backpay amounts will be determined by a distribution plan designed by the plaintiffs in the case. Institutions will not have a say in backpay amounts.

You might be wondering how the member institutions can afford those costs. It’s not as hard as you might think … and you’re one of the reasons.

NCAA President Charlie Baker said the organization expects to generate approximately $277 million in ticket sales to its championships in FY25 and said TV revenue is up by over $180 million over the same time period.

And have you seen the TV contracts for the Power 4 conferences?

Television Contracts

The Big Ten Conference – comprised of 18 teams, including Penn State – signed a seven-year, $7 billion contract with Fox, CBS and NBC in 2022 and is projected to eventually distribute $80-100 million per year to each of its members.

The Atlantic Coast Conference, which includes Pitt among its members, has a media rights deal with ESPN until 2036 that will return a little more than $23 million to its members.

So money should not be a problem, right?

As Lee Corso would say on “College GameDay,” not so fast, my friend.

Congressional Action

Baker is urging Congress to step in to pass legislation to put college sports on a better path, including issues such as eliminating possibility of athletes becoming employees of the institution; replacing 30 different state laws with one federal statute; and protecting the NCAA from lawsuits via some form of antitrust protection.

“You’ve got to grow NIL in order to be able to compete,” said Gov. Josh Shapiro on Tuesday in Pittsburgh. “I’ve been talking with both state officials in Pennsylvania and other states, as well as some federal officials like Senator [Cory] Booker and others who work in the Congress of the United States. I think you’ve got to make sure that there is a larger and fairer pot so that all schools have the opportunity to compete, not just some of our programs in Pennsylvania. We’ve got to make sure that the pot is fair, so all the money doesn’t go into one sport and rob the others.”

And as the wheels of progress in Washington spin slowly, a new world of athlete-revenue sharing will begin.

The new world, at least at the highest levels, will be built on transactional recruiting relationships within a system that permits universities to use direct school funds in a more regulated structure featuring a compensation cap and new enforcement arm.

In a world where more parity is expected, where does that leave the big boys?

Tax Exemptions

As it turns out, keeping their advantage is quite simple, experts contend. They use their big brand, sprawling metro areas, massive alumni bases, wealthy donors and rich relationships to exceed college football’s new cap.

“That’s going to be the new frontier: the above-the-cap, supplemental NIL,” says Walker Jones, the head of the Ole Miss collective and a leading member of The Collective Association. “That’s the new battlefield. The question is, can it really be regulated?”

Probably not. And look no further than the Southeastern Conference (SEC).

Alabama lawmakers are looking to increase their advantage over their S-E-C rivals by tempting top prospects with tax breaks. The “Competitive Edge NIL Tax Cut Act” would exempt student-athletes from paying state income tax on the money they earn through NIL deals.

“As NIL continues to change the landscape of college sports, the state must work to foster an environment that helps our schools land America’s top recruits,” Rep. Joe Lovvorn (R-Ala.) said in a statement. “Exempting NIL earnings from state income tax gives Alabama a competitive edge, leading to more students receiving a quality education here and more championships coming home to Alabama.”

Suffice it to say, this is just the tip of the iceberg.

And what about states that already do not have a state income tax – we’re looking at you, Florida, Tennessee and Texas.

Regulation, Smegulation.

Title IX and Athlete Payments

Just how will this House settlement money be divided among athletes?

It should come as no surprise that a large majority of the $20+ million will be allocated to football and men’s basketball players with estimates around 90 percent. Five percent would be distributed to women’s basketball players with the remaining 5% shared with athletes who participate in other sports such as volleyball, wrestling, or lacrosse.

Before you say the words, Title IX – the Trump administration stated that equity principles should not apply to NIL payments, overturning Biden administration guidance to the contrary.

“It’s a little bit of the wild, wild west right now when it comes to college athletics, and while I want to make sure that student-athletes are able to benefit from their hard work, we want to make sure that it’s done in a way that preserves competition,” said Shapiro in a conversation with PoliticsPA recently in Lancaster. “Take a look at our Commonwealth right now and the sports teams that we have here, I worry sometimes that the dollars that go into NIL are going to one particular sport at the expense of others.

“With the new changes at the college level, where colleges should be able to use some of the dollars that they generate in their normal course of business for NIL, we have to think about making sure that it’s spread out to lift up all sports, not just one particular sport. You got a great powerhouse in Penn State football or Penn State wrestling, Villanova basketball, which has been a powerhouse. That’s great. We want to preserve that, protect that.

“We also want to make sure other schools have the opportunity to compete when it comes to the added challenge of the transfer portal. What worries me is that these colleges and universities aren’t homes for student athletes for several years, but rather for a season, and then they move somewhere else.  I don’t want to take that freedom away from student-athletes, but I think we’ve got to really examine whether the transfer portal, combined with the NIL and really unlimited resources that goes into it, is that really the best answer?

Shapiro’s point about the NCAA’s transfer portal is well-founded, as there has been a 75% increase in DI student-athletes entering the portal since 2021 to over 13,000 student-athletes.

“There’s a group of us who are examining the issue here at the state to see what can be done to protect student-athletes and their interests, but also create a level of competitiveness in all the different sports across the board. So we’re not getting big-time winners and then big-time losers as a result of this system.”

The Pennsylvania State Senate agreed during its last session, adopting a resolution urging Congress and the NCAA to create a standard set of NIL policies across all states and universities to better protect student athletes.

“Whether it’s Congress or the NCAA, if all the states aren’t playing by the same rules, we’ll continue to have to play whack-a-mole and react to whatever other states do to push the envelope on this issue, in order to maintain ‘recruiting competitiveness,’” said Sen. Scott Martin (R-Lancaster), chair of the Pennsylvania Athletic Oversight Committee. “That definitely isn’t an even playing field and is not good for the long-term health of college athletics across this country.”

Other Pennsylvania D-I Colleges

Not all of the Commonwealth’s Division I programs are on board with the House settlement. The University of Pennsylvania and its Ivy League brethren decided to opt out of the settlement. In an email to athletes and coaches, Ivy Executive Director Robin Harris wrote that “[The Ivy League] will not change longstanding rules, including those that prohibit any form of compensation for participation in any intercollegiate athletics program,” Harris wrote in the email. “… [The league] will continue to not provide student-athletes with revenue sharing allocations, athletics scholarships, or direct NIL payments …”

The Ivies could be the lone DI conference to abstain. The Big East and Villanova have signed on, while the consensus among Atlantic-10 Conference members, which include Duquesne, Saint Joseph’s and Temple, was to “support and fund its flagship programs at the highest possible level as permitted by NCAA rules, with the permissive opportunities going forward directly benefiting student-athletes and their success through NIL opportunities.” The Patriot League, which includes Bucknell, Lafayette and Lehigh, has not made a decision.

What’s Next

Would the General Assembly ever consider the possibility of an exemption on student-athletes from paying state income tax on the money they earn through NIL deals?

As it stands today, a donation by you – Joe Fan – to a NIL collective that helps students profit from their NIL is not tax deductible unless the collective has 501(c)(3) status. And since the IRS determined that significant private benefit to athletes outweighs any public good a collective such as Happy Valley United,Alliance 412 or Owl Elite may provide, it limits tax exemption eligibility.

What would be the reaction among residents and taxpayers of the Commonwealth if the General Assembly would pass legislation that says your non-tax exempt donation can go directly to a student who does not have to pay taxes on it.

But would you – Joe Fan – want to put Penn State, Pitt and other PA schools behind the eight-ball if Alabama and others pass such legislation?

Will budget discussions over state funding for the state-related institutions be affected by the seismic changes coming in big-time college athletics?

What will it cost you to go to a football game at Beaver or Acrisure Stadium to see your favorite school play? Are you ready for the surcharge that goes along for paying for the star quarterback?

Just what is the General Assembly willing to concede to keep Penn State football or Pitt volleyball among the nation’s best?

The game is just in the first quarter … but the clock continues to run.